What about a Christmas GIFT to yourself?  The gift of wrapping up your bookkeeping at the end of the year and starting off 2009 with a FRESH new clean slate?  Okay, then, just do it! 

WHY?  Refer to my previous post, http://activerain.com/blogsview/845466/TAXES-+-CHRISTMAS-HOLIDAY-RELIEF.  Here's part two: HOW to do it quickly and simply.  (And the best part is that you can do it all while watching your favorite TV show or a movie, and it's done before you know it!)

STEP 1: PREPARE. 

Get the following supplies:

• Clear plastic filing tub with clear plastic lid
• 10-20 Hanging file folders (letter size)
• 20+ File folders (letter size)
• 4 Large labels (Blank sheets of paper, with your Sharpie write "2008 TAXES" on each)

And then:

• Tape labels to the insides of the filing tub (so you can see it from the outside)
• Place file folders into the filing tub

ESTIMATE:  30 minutes.  And you feel organized already, don't you!

STEP 2: GATHER DOCS

Get a cardboard box (or 2) and toss into it:

• ALL receipts from the year (business AND personal)
• ALL bills which were paid
• ALL income stubs
• ALL schedules and calendars
• ALL automobile mileage logs
• ALL tax filing stuff

ESTIMATE: 60 minutes (including searching through your desk and office and purse)

STEP 3: GROUP DOCS

Clear off the dining room table and put all documents into the following piles:

• Business receipts (bills paid)
• Personal receipts
• Medical receipts
• Automobile (mileage logs + auto expenses)
• College tuition paid
• Real Estate (a separate pile for each property: Home, Vacation home/Timeshare, Rentals)
• Schedules and calendars (you'll probably need to reference these later)
• Bank statements + checkbook stubs
• IRS stuff (1099s, 1098s, W-2s, quarterlies paid to IRS)

Then put each pile into a file folder, and label it.  NOTE: you may be able to itemize expenses other than these common ones, please check with your accountant.

TIP:  Go online to your mortgage lender's web site and print out your mortgage interest paid for the year.  It's quicker than waiting until they mail out your 1098 form.

ESTIMATE:  90 minutes (if your kids DON'T help you -- longer if they do)

STEP 4: SORT BUSINESS DOCS

Pull out the Business receipts and sort them into the following stacks:

• Accounting/Bookkeeping
• Ads/Marketing
• Computer
• Copy/Printing
• Dues/Fees
• Education
• Entertainment
• Equipment
• Furniture/Fixtures
• Gifts
• Insurance
• Legal Fees
• Licenses
• Mailing/Shipping
• Miscellaneous
• Payroll
• Professional Fees
• Supplies
• Telephone
• Travel & Automobile

Put each stack into a separate envelope and label it. Put all the envelopes back into the "Business receipts" folder.

NOTE: These are NOT the exact same categories used on the IRS Schedule C form.  However, your accountant will put the expenses into the correct IRS categories.

ESTIMATE:  60 minutes

STEP 5: CALCULATE DOLLAR AMOUNTS

For each stack you just sorted, you will need to total the dollar amount.  Some old-fashioned folks use an adding machine with tape, some high-tech folks use Quicken.  I prefer a simple excel spreadsheet because then I sort by date (to find duplicates), and sort by vendor (to ensure I have all entries).

ESTIMATE:  4 hours

STEP 6: LIST TOTALS

Make a list of all the totals you just calculated.  If your accountant is really organized, she probably already sent you a questionnaire form which you can now complete. 

Now just snap on the lid of the file tub and put it away in your office until JAN.  Congratulations!

Oh, and YES please call your accountant, let her know you are DONE with 99% of your tax return and would like to schedule the earliest appointment available in January.  If she's out of the office, leave a message.

ESTIMATE:  30 minutes

STEP 7: TAKE TO YOUR ACCOUNTANT

Take your list of totals with you to your appointment.  (And take your file tub also -- that way you won't have to follow up with a list of questions for later.)

You won't be able to file in JAN because you'll need to wait and receive all 1099s, 1098s etc in the mail in early FEB.  But you'll have it 99% completed, and then you can simply drop off the last few docs in early FEB, sign your return, and await your huge refund!

Oh and your accountant can help you prepare a Profile and Loss Statement if needed.

ESTIMATE: 90 minutes

Remember, at any point along these steps, you can always delegate.  But the more steps you do yourself, the better handle you have on running your business and its profitability.

Breathe a sigh of relief, you're DONE!  Until next year, that is...

P.S. Here's ordering info about the plastic portable filing box at Staples. com: 

http://www.staples.com/office/supplies/p1_Storage-Totes-and-Crates_187624_Business_Supplies_10051_SEARCH

P.P.S. Print out this list and tape it above your computer so you'll get motivated... He he, it's a trick I use, when I get tired of looking at my list, I do it!  Making up my mind is half the battle, isn't it...

Join my NEW group for professionals who work from their home office at http://activerain.com/groups/virtualoffice

Regina P. Brown